Stakeholder trust and efficiency at alpine destinations in Switzerland: the role of stakeholder integration and procedural justice

Stakeholder trust and efficiency at alpine destinations in Switzerland: the role of stakeholder integration and procedural justice

The Swiss Alpine Tourism Industry is facing enormous challenges. The major challenge comes from exponentially increasing regional competition (from other parts of Europe) due to the rise of the low-cost carriers in Europe. The increased competition exposes the problem that the value chain at Swiss Alpine tourism destinations is highly fragmented. Collective action is needed for individual success; however, because stakeholder needs and demands often are heterogeneous, stakeholders in the Industry tend to be hard to manage based on its structural idiosyncrasies. Local tourist organisations (LTOs) that act as the central node at a destination effectively have to balance two conflicting goals, [1] increasing the number of tourists visiting the destination (arrivals) and [2] fostering stakeholder collaboration. Destination management strategies that only focus on maximizing arrivals often produce considerable external costs and generate wealth for a limited number of stakeholders. These strategies are detrimental to intra-destination collaboration. Tourism destinations need to face the competition on a regional level to survive, but without stakeholder collaboration, the ability to successfully compete may not succeed.

Research indicates that stakeholder management can potentially act as an effective approach to tackle the dilemma. This study generates practical knowledge that LTOs can use to shape their strategies to better serve their stakeholders by researching the question what are the relationships of stakeholder integration, procedural justice and trustworthiness on trust and efficiency amongst touristic destinations in Switzerland? The study also contributes to stakeholder theory by showing that stakeholder integration practices are effective in creating trust between an organisation and its stakeholders to generate higher efficiency and the role of procedural justice has in a stakeholder management context. Data from 354 hotels were collected and analysed regarding their perception of the level of stakeholder integration, procedural justice, and trust of LTOs via a survey. Secondary data obtained from the Federal Statistical Office was used to measure efficiency at 112 Alpine destinations.

Results showed that stakeholder integration was directly and positively associated with perceived organisational trustworthiness, which, in turn, was linked to increased trust levels towards the LTO. However, the relationships between stakeholder integration, perceived organisational trustworthiness, and trust were negatively moderated by procedural justice. The higher an LTO scored on procedural justice, the smaller the contribution of stakeholder integration to positively shape the perceived trustworthiness of the organisation or foster trust towards that LTO. Stakeholder integration did have a positive effect on destination efficiency when serially mediated through perceived organisational trustworthiness and trust.

Findings showed that stakeholder integration practices can help to build trust among destination stakeholders and LTOs act as the principal orchestrators in trust formation. Trust among destination stakeholders is a vital precondition for destination networks to function. As this study has shown, trust has the potential to increase the efficiency of the destination. Consequently, the elements of the local tourist industry should focus on fostering stakeholder cooperation based on trust and avoiding rivalry on an intra-destination level.